Understanding When You May Not Need Certain Types of Auto Insurance
Auto insurance is one of the best ways that a vehicle owner can protect themselves in case of errant and terrible accidents, or costly liabilities. When it comes to auto insurance, there are some situations in which you might not need several types of cover. In this article, we look at a number of situations in which you could potentially skip a few types of auto insurance while still continuing to cover those that would protect you and others on the road.
When You Own an Older Vehicle
If you own an older car that’s not worth much money that could be used to replace it, comprehensive and collision coverage may not be worth the cost. After all deductibles, the proceeds of the payout could be less than the vehicle’s value. On the other hand, your liability insurance – which covers injury to others – is important.
When Your Car is Paid Off
Upon repayment of your auto loan, your lender no longer forces you to maintain comprehensive and collision coverage. You’re still required, of course, to comply with the various laws mandating liability insurance to operate your automobile legally.
You Don’t Drive Much
If you hardly ever use your car – it sits around much of the time – consider lowering your comprehensive and collision coverage. You should always have liability coverage, regardless of how often you drive.
When You Are Covered by Credit Card or Rental Car Insurance
Most credit cards and rental car companies offer collision and damage insurance for rental cars, so you won’t have to buy additional insurance for short-term rentals. Check your card’s terms and conditions to make sure the cover is adequate for your needs.
If You Have Good Health Insurance
You might not need Personal Injury Protection (PIP) or Medical Payments (MedPay), which can be redundant depending on your health insurance coverage — particularly if it pays your bills for car accident injuries. To waive PIP or MedPay, click here.
When Your State Has No-Fault Insurance
In many states, you as the driver must carry a type of insurance that is called Personal Injury Protection (PIP), which is often part of no-fault insurance laws. If you live in a ‘no-fault’ state, you may be covered for medical expenses but you don’t want to rely on the other party being insured, you should get uninsured/underinsured motorist coverage.
Just as important, knowing what types of auto insurance you do not need will help you keep your car coverage as affordable as possible. While those excluded situations are good reasons to scale back your coverage, it is typically not wise to drop your liability insurance. It is the minimum level of protection you will need both to protect the people around you in case of a crash and to protect your own financial interests in case an accident is your fault.
Always take a close look at your habits as a driver, the value of the car you are covering, and what your state requires of drivers like you before making your decisions. An experienced insurance agent can help you make the right choices for yourself.
